INVESTMENT ADVISORY AGREEMENT
AMERINDO TECHNOLOGY FUND
A SERIES OF
AMERINDO FUNDS INC.
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July 31, 1996
Amerindo Investment Advisors Inc.
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Gentlemen:
We herewith confirm our agreement with you as follows:
1. We propose to engage in the business of investing and
reinvesting the assets of Amerindo Technology Fund (the "Fund"), a series of
Amerindo Funds Inc. (the "Company"), in securities of the type, and in
accordance with the limitations, specified in our Articles of Incorporation,
By-Laws and Registration Statement filed with the Securities and Exchange
Commission under the Investment Company Act of 1940 (the "1940 Act") and the
Securities Act of 1933, including the Prospectus forming a part thereof (the
"Registration Statement"), all as from time to time in effect, and in such
manner and to such extent as may from time to time be authorized by the
Company's Board of Directors. We enclose copies of the documents listed above
and will furnish you such amendments thereto as may be made from time to time.
2. (a) We hereby employ you to manage the investment and
reinvestment of our assets as above specified, and, without limiting the
generality of the foregoing, to provide the management and other services
specified below.
(b) Subject to the general control of the Company's Board of
Directors, you will make decisions with respect to all purchases and sales of
our portfolio securities. To carry out such decisions, you are hereby
authorized, as our agent and attorney-in-fact, for our account and at our risk
and in our name, to place orders for the investment and reinvestment of our
assets. In all purchases, sales and other transactions in our portfolio
securities you are
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authorized to exercise full discretion and act for us in the same manner and
with the same force and effect as our corporation itself might or could do with
respect tosuch purchases, sales or other transactions, as well as with respect
to all other things necessary or incidental to the furtherance or conduct of
such purchases, sales or other transactions. In furtherance of such and subject
to applicable law and procedures adopted by the Company's Board of Directors,
you may (i) pay commissions to brokers other than yourself which are higher than
such that might be charged by another qualified broker to obtain brokerage
and/or research services considered by you to be useful or desirable for your
investment management of the Fund and/or other advisory accounts of yours and
any investment advisor affiliated with you; and (ii) consider the sales of
shares of the Fund by brokers including your affiliates as a factor in your
selection of brokers for portfolio transactions.
(c) You will report to the Company's Board of Directors at
each meeting thereof all changes in the Fund since your prior report, and will
also keep us in touch with important developments affecting the Fund and, on
your own initiative, will furnish us from time to time with such information as
you may believe appropriate for this purpose, whether concerning the individual
entities whose securities are included in the Fund the activities in which such
entities engage, Federal income tax policies applicable to our investments, or
the conditions prevailing in the economy generally. You will also furnish us
with such statistical and analytical information with respect to our portfolio
securities as you may believe appropriate or as we may reasonably request. In
making such purchases and sales of our portfolio securities, you will comply
with the policies set from time to time by the Company's Board of Directors as
well as the limitations imposed by our Articles of Incorporation, the provisions
of the Internal Revenue Code relating to regulated investment companies and the
1940 Act, and the limitations contained in our Registration Statement.
(d) It is understood that you may from time to time employ,
subcontract with or otherwise associate yourself with, entirely at your expense,
such persons as you believe to be particularly fitted to assist you in the
execution of your duties hereunder.
(e) You or your affiliates will also provide supervisory
personnel who will be responsible for supervising and monitoring the performance
of our Administrator in connection with its duties under our Administrative
Services Agreement. Such personnel may be your employees or employees of your
affiliates or of other organizations. It is understood that we have retained, at
our expense, the Administrator to perform the operational components of the
functions and services listed herein.
(f) You or your affiliates will also furnish us such
additional administrative supervision and such office facilities as you may
believe appropriate subject to the requirements of any regulatory authority to
which you may be subject. We will reimburse you for all of our operating costs
incurred by you, including rent, depreciation of equipment and facilities,
interest and amortization of loans financing equipment used by us and all the
expenses incurred to conduct our affairs. The amounts of such reimbursements
shall from time-to-time be agreed upon between us.
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3. We agree, subject to the limitations described below, to be
responsible for, and hereby assume the obligation for payment of, all our
expenses including: (a) brokerage and commission expenses; (b) foreign, federal,
state or local taxes, including issuance and transfer taxes incurred by or
levied on us; (c) commitment fees, certain insurance premiums and membership
fees and dues in investment company organizations; (d) interest charges on
borrowings; (e) charges and expenses of our custodian; (f) charges and expenses
relating to the issuance, redemption, transfer and dividend disbursing functions
for us; (g) telecommunications expenses; (h) recurring and non-recurring legal,
accounting and recordkeeping expenses; (i) costs of organizing and maintaining
the Company's existence as a corporation; (j) compensation, including directors'
fees, of any of our directors, officers or employees who are not your officers
or employees or those of the Administrator or their affiliates, and costs of
other personnel providing administrative and clerical services to us; (k) costs
of providing shareholders' services, including charges and expenses of persons
providing confirmations of transactions in the Fund's shares, periodic
statements to shareholders and recordkeeping services, and costs of
shareholders' reports, proxy solicitations, and corporate meetings; (l) fees and
expenses of registering our shares under the appropriate federal securities laws
and of qualifying our shares under applicable state securities laws, including
expenses attendant upon the initial registration and qualification of these
shares and attendant upon renewals of, or amendment to, those registrations and
qualifications; (m) expenses of preparing, printing and delivering the initial
registration statement and of preparing, printing and delivering the Prospectus
to existing shareholders and of printing shareholder application forms for
shareholder accounts; (n) fees and expenses payable to the Adviser, Distributor,
Administrator, custodian, transfer agent and dividend agent; and (o) any other
distribution or promotional expenses contemplated by an effective plan adopted
by us pursuant to Rule 12b-1 under the 1940 Act. Our obligation for the
foregoing expenses is limited by your agreement to be responsible, while this
Agreement is in effect, for any amount by which our annual operating expenses,
including distribution expenses (excluding taxes, brokerage, interest and
extraordinary expenses) exceed the limits on investment company expenses
prescribed by any state in which the Fund's shares are qualified for sale.
4. We will expect of you, and you will give us the benefit of,
your best judgment and efforts in rendering these services to us, and we agree
as an inducement to your undertaking these services that you will not be liable
hereunder for any mistake of judgment or for any other cause, provided that
nothing herein shall protect you against any liability to us or to our security
holders by reason of willful misfeasance, bad faith or gross negligence in the
performance of your duties hereunder, or by reason of your reckless disregard of
your obligations and duties hereunder.
5. (a) In consideration of the foregoing we will pay you an
annual fee equal to 1.50% of the Fund's annual average daily net assets. Your
fee will be accrued by us daily, and will be payable on the last day of each
calendar month for services performed hereunder during that month or on such
other schedules as you shall request of us in writing. You may waive your right
to any fee to which you are entitled hereunder, provided such waiver is
delivered to us in writing. Any reimbursement of our expenses, to which we may
become entitled pursuant to the last sentence of paragraph 3 hereof, will be
paid to us at the end of the month for which those expenses are accrued, at the
same time as we pay you your fee.
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(b) Pursuant to the Fund's Distribution and Service Plan and
the Shareholder Servicing Agreement, you will also act as a shareholder
servicing agent for the Fund pursuant to which the Fund is permitted to pay you
a maximum of 0.25% per annum of the Fund's average daily net assets to
compensate you for providing shareholder services and to permit you to
compensate banks, savings and loans and other financial institutions (the
Adviser, with such other institutions, each a "Shareholder Servicing Agent")
whose clients are Fund shareholders for providing shareholder services. In
addition, you may use the advisory fee for distribution of our shares and for
servicing purposes including defraying the costs of performing shareholder
servicing functions on behalf of the Fund and to compensate others with whom you
may have entered into a written agreement for performing shareholder servicing
functions on behalf of the Fund. To the extent that you or your affiliates
directly may make payments to other third parties who render shareholder support
services and that such payments may be deemed indirect financing of an activity
primarily intended to result in the sale of shares of the Fund within the
context of Rule 12b-1 under the 1940 Act (the "Rule"), then such payments by you
shall be deemed to be authorized under the Fund's Distribution and Service Plan
adopted pursuant to the Rule. You will, in your sole discretion, determine the
amount of such payments and may from time to time in your sole discretion
increase or decrease the amount of such payments; provided, however, that no
such payment will increase the amount the Fund is required to pay you or any
person under this Agreement or any agreement. Any payments made by you for such
purposes are subject to compliance with the terms of written agreements in a
form satisfactory to the Fund's Board of Directors to be entered into by you and
the participating organization.
6. This Agreement will become effective on July 31, 1996 and
shall continue in effect until July 30, 1998 and thereafter for successive
twelve-month periods (computed from each July 31), provided that such
continuation is specifically approved at least annually by the Company's Board
of Directors or by a majority vote of the holders of the Fund's outstanding
voting securities, as defined in the 1940 Act, and, in either case, by a
majority of those of the Company's Directors who are neither party to this
Agreement nor, other than by their service as Directors of the Company,
interested persons, as defined in the 1940 Act, of any such person who is party
to this Agreement. Upon the effectiveness of this Agreement, it shall supersede
all previous Agreements between us covering the subject matter hereof. This
Agreement may be terminated at any time, without the payment of any penalty, by
vote of a majority of the Fund's outstanding voting securities, as defined in
the 1940 Act, or by a vote of a majority of the entire Board of Directors, on
sixty days' written notice to you, or by you on sixty days' written notice to
us.
7. This Agreement may not be transferred, assigned, sold or in
any manner hypothecated or pledged by you and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and in
applicable rules or regulations of the Securities and Exchange Commission.
8. (a) Except to the extent necessary to perform your
obligations hereunder, nothing herein shall be deemed to limit or restrict your
right, or the right of any of your
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officers, directors or employees who may also be a director, officer or employee
of ours, or of a person affiliated with us, as defined in the 1940 Act, to
engage in any other business or to devote time and attention to the management
or other aspects of any other business, whether of a similar or dissimilar
nature, or to render services of any kind to any other corporation, firm,
individual or association.
(b) The Company understands that you and your affiliates and
employees, as well as their agents privy to the transactions made in the
Company's account, may, subject to the Fund's and to your Code of Ethics,
purchase and sell investments for either your or their own account, which
investments may include the same investments that the Company's account is
purchasing or selling; provided, however, that no purchase or sale by you, or
any of your affiliates, agents or employees, or any of their agents privy to the
transactions made in the Company's account, will be made in a manner which would
result in any detriment to the Company, and such persons shall always keep the
interests of the Company first in effecting any such transaction.
If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the enclosed copy
hereof.
Very truly yours,
AMERINDO FUNDS INC.,
AMERINDO TECHNOLOGY FUND
By: /s/
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Name:
Title:
ACCEPTED: July 31, 1996
AMERINDO INVESTMENT ADVISORS INC.
By: /s/
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Name:
Title:
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